In March 2015, Del Monte Pacific announced that they have completed the deal to purchase Sager Creek Vegetable Company for $75 million. Del Monte Foods produces canned vegetable, fruit, and tomato products. Sager Creek produces specialty vegetables. The acquisition deal serves as a way for Del Monte to expand their product line and strengthen their existing brand.
Sager Creek manufactures well-known brands such as Popeye®, Freshlike®, Trappey’s®, Veg-all®, and Allens®. The company generates annual revenue of $250 million. Nils Lommerin, Chief Executive Officer of Del Monte Foods, said this about the deal, “This acquisition provides Del Monte the opportunity to expand on Sager Creek’s Foodservice business platform and new retail product offerings while driving significant operating synergies in our network of vegetable production facilities.”
Along with the acquisition comes some difficulty in combining logistics and distribution services. In 2014, Sager Creek acquired Allens Inc. after a bankruptcy proceeding. Sager Creek’s acquisition by Del Monte is the next logical step. Chris Kiser, Chief Executive Officer of Sager Creek, said, “On behalf of our associates, we are honored and proud to become a part of the Del Monte family.
However, the changes are all very new and planning is needed to make the transition happen smoothly. It’s unclear at this time which facilities will remain open and which logistics services will be utilized by Del Monte Pacific. It’s expected that some product lines that are underperforming will be discontinued and the entire distribution plan will need to be overhauled to be more cost effective for the new, combined company.
Del Monte Foods is one of the biggest producers and distributors of food products in the U.S. The acquisition of Sager Creek will help them continue to excel in the market and be a leader in canned products, as long as they can make distribution run smoothly and efficiently.